Question

The following accounts, in alphabetical order, were selected from recent financial statements of Krispy Kreme Doughnuts, Inc.

For each account, indicate whether the normal balance is a debit or a credit, and the financial statement—balance sheet or income statement—where the account should be presented.

Account Normal Balance Debit/Credit Balance Sheet or Income Statement
Accounts payable
Accounts receivable
Common stock
Depreciation expense
Interest expense
Interest income
Inventories
Prepaid expenses
Property and EquipmentRevenues

Answer 1

The normal balances and financial statement presentation of various accounts for Krispy Kreme Doughnuts, Inc.

Step-by-step explanation:

The normal balance of an account refers to whether the increase in the account is debited or credited. For the accounts mentioned:

• Accounts payable: Normal balance is credit. Presented on the Balance Sheet.
• Accounts receivable: Normal balance is debit. Presented on the Balance Sheet.
• Common stock: Normal balance is credit. Presented on the Balance Sheet.
• Depreciation expense: Normal balance is debit. Presented on the Income Statement.
• Interest expense: Normal balance is debit. Presented on the Income Statement.
• Interest income: Normal balance is credit. Presented on the Income Statement.
• Inventories: Normal balance is debit. Presented on the Balance Sheet.
• Prepaid expenses: Normal balance is debit. Presented on the Balance Sheet.
• Property and Equipment: Normal balance is debit. Presented on the Balance Sheet.
• Revenues: Normal balance is credit. Presented on the Income Statement.

Answer 2

The list is as follows:

Accounts payable - Credit - Balance Sheet

Accounts receivable - Debit - Balance sheet

Common stock - Credit - Balance Sheet

Depreciation expense - Debit - Income Statement

Interest expense - Debit - Income Statement

Interest income - Credit - Income Statement

Inventories - Debit - Balance sheet

Prepaid expenses - Debit - Balance sheet

Property and Equipment - Debit - Balance sheet

Revenues - Credit - Income Statement